NY court upholds foreclosure abuse law

New York’s highest court has upheld the constitutionality of the state’s Foreclosure Abuse Prevention Act (FAPA), confirming that it applies retroactively and significantly limits mortgage lenders’ ability to re-start the statute of limitations on old foreclosure cases.​

What the court decided

The New York Court of Appeals ruled on November 25, 2025, that FAPA is constitutional and that its key provisions apply to foreclosure actions filed before the law took effect, so long as a final judgment of foreclosure and sale has not yet been enforced. The court rejected arguments from lenders that retroactive application violated due process or the state Constitution’s Contract Clause, finding that lenders have no vested right in prior procedural rules about how limitations periods can be manipulated.​

What FAPA does

FAPA keeps the existing six-year statute of limitations for mortgage foreclosures but prevents lenders from “de‑accelerating” loans or voluntarily discontinuing actions in order to reset that six-year clock after it has started. It also restricts the use of refiling and other procedural tactics to revive foreclosure claims that are already time-barred, tightening estoppel rules so that once the limitations period runs, the claim is generally dead.​

Impact on homeowners and lenders

For homeowners, the decision means stronger protection against repeated or recycled foreclosure lawsuits based on the same default, especially where earlier cases were dismissed or abandoned and the six-year period has expired. For lenders and servicers, it increases the risk that delays or strategic withdrawals of earlier actions will result in claims being time-barred, and forces closer tracking of acceleration dates and litigation timelines.​

Key limits and open questions

The ruling makes clear that FAPA governs all pending and past foreclosure actions without an enforced final judgment, but it does not change cases where a final foreclosure judgment has already been executed. The Court of Appeals did not definitively resolve potential Takings Clause challenges under the state constitution, leaving room for future litigation on whether FAPA’s retroactive application could amount to an unconstitutional taking in some circumstances.